After about 3 months of isolation we are all getting tired of reading about it so I thought it would be nice to return to basics and talk about the difference between saving and investing. This article from Fidelity explains the difference between the two words which are sometimes used interchangeably.
Saving can be one of the hardest things to start. There are so many reasons and excuses not to save. We are constantly subjected, even during isolation, by ads convincing us to buy this, that, and the other thing. After all, we deserve it don’t we? Yes and no. We all need to reward ourselves occasionally, but that expensive purchase is soon forgotten or supplanted by something else. The reward brought instant gratification, and saving, unfortunately, does not bring the same satisfaction. It is a more subtle type of pleasure.
Saving is a balance between the present and the future. The present is tangible. The future is elusive. A bird in hand is better than two in the bush, right? Saving for a future that may be 20 or 30 years away is hard because it is easier to prioritize where we are now. If we don’t think about the future, though, we are hurting ourselves. In the long run. Perhaps we should look at saving as an investment in our future selves. Perhaps the best purchase we can make is to not make a purchase.
Stay safe & healthy,
Chris